USL net profit up three times

United Spirits Limited (USL), owned by UB Group, backed by good volume growth and reduction in cost of molasses, has reported a three-time jump in net profit to Rs 96.8 crore for the third quarter of this financial year, compared to the corresponding period of last year.

Total income of India’s largest spirits company went up by 31 per cent to Rs 1,355 crore, as sales volumes grew by 12 per cent to 23.6 million cases.

"The enhanced volume, the price increases during this period on top of price increases during FY09 have raised sales revenues. Spirit prices during Q3 are lower than their peak of October-November 2008, which boosted net profits," a company official said.

USL, despite fluctuations in sugar availability and prices, has been able to contain costs through a combination of long-term contracts and alternating between feedstock options like grain and molasses. These steps have also aided the company in almost doubling its operational profit to Rs 232 crore.

"One of the important developments was in Andhra Pradesh where the government acceded to the long-standing demand for price increase. As it comes after a substantial period of time, it will help mitigate the combined impact of inflationary pressures," he added.